Anti-Money Laundering (AML) Program

Unicorn Bay Tech INC.

Version: 1

Effective Date: 07.09.2024

1. Introduction

This Anti-Money Laundering (AML) program outlines the commitment of Unicorn Bay Tech INC. (the "Company") to combat money laundering and terrorist financing activities. The Company provides online entertainment services, including but not limited to gaming and other digital services. This AML program establishes a robust framework for preventing, detecting, and reporting money laundering activities in compliance with the laws of the United States and relevant international standards, including those set by Visa and MasterCard.

2. Objectives

The primary objectives of this AML program are to:

• Prevent the Company’s services from being used for money laundering or terrorist financing.
• Establish robust internal controls and procedures to detect and report suspicious activities.
• Ensure compliance with all applicable AML laws and regulations.
• Protect the Company’s reputation and integrity.
• Ensure compliance with international standards, such as FATF and GDPR.

3. Scope

This program applies to all employees, officers, directors, and agents of the Company.

4. Definitions

• Money Laundering: The process by which criminals disguise the original ownership and control of the proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.
• Terrorist Financing: The provision of funds or financial support to individual terrorists or terrorist groups.
• Suspicious Activity: Any transaction or behavior that deviates from the intended or expected use of the service, which may indicate money laundering, terrorist financing, or other illegal activities.
• Customer: Any individual or entity intending to engage in transactions or business relations with Unicorn Bay Tech INC.
• Employee: Any individual employed by Unicorn Bay Tech INC., including but not limited to full-time, part-time, and temporary staff.
• AML Officer: An Employee, trained, qualified, and responsible for ensuring compliance with AML regulations, developing and implementing AML policies, monitoring transactions for suspicious activity, conducting risk assessments, and submitting reports to regulatory authorities. AML officer’s responsibilities are covered by Unicorn Bay Tech INC. Head of Risk, Fraud, and Payment Department (RFPD).
• Know Your Customer (KYC): The process of identifying and verifying the identity of customers through personal documentation analysis as per respective KYC program.
• Enhanced Due Diligence (EDD) and Risk Verification: The process of more complex and thorough verification of the identity of customers, assessment of their risk profiles, monitoring of their financial activity with the platform, as well as checking their sources of income and risk profile.
• Suspicious Activity Monitoring (SAM): An ongoing process that implies constant user activity monitoring through dedicated tools and creating respective reports when there is a suspicion that funds are derived from illegal activities conducted as per respective AML program.
• Suspicious Activity Report (SAR): A document that financial institutions must file with FinCEN whenever there is a suspected case of money laundering or fraud.
• OFAC Sanctions List: A list of individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries. It also lists individuals, groups, and entities, such as terrorists and narcotics traffickers designated under programs that are not country-specific.

5. AML Program Components

• Identification and Verification:

  - Primary KYC: Collecting and verifying the identity of customers before establishing a business relationship as per KYC program. This includes collecting information such as name, date of birth, physical address and location, and identification numbers. Verification of identity documents, payment methods used on the platform, background checks, and Watch List screening activities are also included.

  - Enhanced Due Diligence (EDD): Applying more complex and thorough verification for high-risk customers. This includes verification of additional documentation, background checks, and assessment of the customer's risk profile.

• Risk Assessment and Analysis:

  - Assessing and analyzing the customer’s risk profile based on various factors such as location, connection and device info, services used, behavioral patterns, security system flagging, KYC and Risk Verification process results, and payment monitoring.

• Ongoing Monitoring:

  - Continuously monitoring customer profiles, payment methods, and transactions to detect unusual or suspicious activity in a timely manner. This includes creating and managing fraud flags and risk alerts through the use of analytical dashboards and operational flows as per the Risk and Fraud Monitoring and Management Procedure.

• Service Usage Limitation and Termination:

  - Timely reaction, limitation, or termination of business relations with customers involved in potential money laundering, fraud, or terrorist financing activities. This may include reversing financial transactions conducted via the service if necessary.

• Training and Awareness:

  - Providing ongoing AML training to employees, including the recognition of suspicious activities, and creating and documenting guidelines for reporting and handling respective customer cases. Regular training sessions ensure staff stay updated on new regulations and best practices.

• Data Analysis and Data-Driven Updates:

  - Regularly reviewing and analyzing identified suspicious cases and customers to keep internal processes and protocols up-to-date. An improvement plan is outlined to respond effectively to changing approaches and new indicators.

• Internal Control and Audit:

  - Conducting regular knowledge checks, establishing proper Quality Assurance processes, and tracking key performance indicators to ensure high adherence to this program.

6. Roles and Responsibilities

• Management:

  - Approve and oversee the implementation of the AML program.

  - Ensure that adequate resources are allocated for the effective operation of the AML program.

  - Conduct regular audits and reviews of AML procedures and controls.

• Legal Department:

  - Ensure compliance with existing laws and regulations.

• AML Officer:

  - Develop, implement, and maintain the AML program.

  - Conduct AML training and awareness programs.

  - Serve as a single point of contact for AML-related escalations and reports.

  - Make respective managerial and operational decisions in the case of high-risk customers, when required.

  - Report respective AML-related cases and customers to designated authorities when required by law.

• RFPD Managers, Customer Support Agents:

  - Adhere to the AML program and procedures.

  - Analyze, assess risks, and escalate respective cases to ensure proper actions are taken in a timely manner.

  - Utilize and follow the AML-related guidelines in daily operations.

  - Participate in AML training programs.

7. Tools and Processes Overview

• KYC and EDD:

- Primary KYC: Using TSEVO and GIDX solutions to conduct identity verification through automated protocols and identification documentation requests according to established KYC program. Assessing the purpose and intended nature of the business relationship.

- Enhanced Due Diligence and Risk Verification: Conducting more complex and sophisticated identification and payment method verification, requesting additional documentation, and conducting background checks according to Enhanced Due Diligence and Risk Verification Procedure.

- Conducting more frequent and detailed transaction monitoring according to the Risk and Fraud Monitoring and Management Procedure.

- AML officer’s review and approval for establishing or continuing business relationships with customers when required.

• SAM:

- Device Monitoring: Monitoring GPS, location, IP, and VPN usage.

- Transactions Monitoring: Analyzing payment processing alerts, behavioral patterns, transactional activity, and payment method usage.

- Watch List Screening: Tracking records of dedicated Watch Lists such as OFAC Sanctions List, GSA Excluded Parties List, and others to match customer information.

- Account Activity Monitoring: Tracking service abuse, fake memberships, internal balance manipulations, risky patterns, and multiple account cases.

- Risk Flags Monitoring: Handling internal risk management system flag checks.

- Monitoring and screening are conducted in accordance with the Risk and Fraud Monitoring and Management Procedure and Watch List Screening and Monitoring Program.

• Control and Audit:

- Daily/Weekly Workflows: Establishing regular workflows and manual customer reviews conducted by RFPD officers to ensure consistency and continuity of processes. Establishing escalation protocols for the Support Team to ensure timely notifications about potential risk indicators.

- Cross Checks and Audits: Conducting regular performance and quality control reviews to ensure employees’ adherence to AML procedures.

• Reporting and Escalation:

- Daily/Weekly Reports: RFPD officers who conduct customer profile assessments create daily and weekly reports checked by the AML officer.

- Authorities Notification: When required, the AML officer files respective reports to authorities, including notifying OFAC and other regulatory bodies and filing Suspicious Activity Reports (SAR) with FinCEN.

8. Records and Confidentiality

• Processes are listed within internal Knowledge and Learning bases and documented to ensure integrity and consistency.
• Processes and procedures are reviewed monthly and updated according to procedural changes and new information received.
• All internal procedures and processes are kept confidential to avoid security breaches.
• All case records are stored and documented within internal tools and systems to be readily available.

9. Conclusion

Unicorn Bay Tech INC. is committed to maintaining a strong AML program to prevent and detect money laundering activities. All employees, contractors, and agents are expected to adhere to this program to protect the integrity of our services and prevent financial crimes. This AML program provides a comprehensive framework to help Unicorn Bay Tech INC. comply with AML regulations and protect against the risks associated with money laundering in the entertainment industry.